BA Boeing Co

By Doug Cameron and Benjamin Katz 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 15, 2020).

Boeing Co. said deliveries and new orders for its jetliners hit their lowest point in more than a decade as the global grounding of the 737 MAX undermined the aerospace giant's business.

The U.S. plane maker in 2019 handed over 380 aircraft, including military versions of its jetliners, a 14-year-low that compares with a record 863 deliveries by European rival Airbus SE. Boeing delivered 806 planes in 2018, a high for the company.

The Chicago-based company last year brought in new orders for 246 commercial jets of all types, its lowest tally before cancellations and model swaps since 2003.

Boeing's order count has suffered from a two-year drought from China customers, which historically has accounted for a quarter of deliveries. The U.S. is due to unveil an initial trade deal Wednesday that President Trump -- in a tweet -- has said could unlock $20 billion in aircraft orders.

Boeing declined comment, but previously said that orders could be depressed by the trade spat and China's latest aircraft plans. Chinese carriers order most of their planes via a central government system, though they have continued to take Boeing jets from leasing companies.

Boeing and Airbus have enjoyed a two-decade duopoly that is now out of kilter because of the MAX's grounding last year. Airbus first overtook Boeing in annual orders in 1999 and by deliveries three years later. The duo have traded top spots regularly since then.

Shares of Boeing edged higher after its report Tuesday, as the company handed over more 787 Dreamliners -- its biggest source of cash with the MAX grounded -- and deliveries of military jets and helicopters more than doubled from a year earlier. Airbus shares also gained less than 1%.

The record 45 Boeing 787s delivered in the fourth quarter, along with other widebody jets, could add $1.5 billion to current sales estimates, said analyst Cai von Rumohr at Cowen.

Order cancellations climbed for both Boeing and Airbus in 2019, especially for larger widebodies as airline traffic growth has slowed and carriers in some emerging markets have been buffeted by competition and volatile exchange rates.

A record number of airline collapses last year idled more than 400 planes around the world, though most were returned to work to help fill the void left by the MAX's grounding.

"We will see some more failures," said Stuart Hatcher, chief operating officer at IBA Group Ltd, a U.K.-based specialist in aircraft values and repossessions.

The uncertainty over when the MAX might return continued as American Airlines Group Inc. said Tuesday that it would remove the plane from its schedules until June, two months longer than previously planned. Carriers are adjusting to the prospect that regulators may require pilots to go through costly and time-consuming simulator training before flying the plane again.

Boeing said it delivered 35 jets in December, its highest count since March, when the MAX was grounded by regulators in the wake of two fatal crashes, forcing the company to suspend deliveries of the aircraft.

The company still has orders for around 4,500 of the planes, but has halted production because of uncertainty over when the MAX might resume flying and the risk of airlines and leasing companies canceling existing deals.

Leasing companies account for more than 40% of the MAX order book, and even before the aircraft's grounding they were struggling to place the jets with carriers.

Airbus's record delivery tally for 2019 still fell short of the company's original target because of production setbacks. Guillaume Faury, who took the helm at Airbus in April, has had to hold back on boosting its A320 production target by 10% to about 70 aircraft a month. The narrowbody jet, Airbus's rival to the Boeing 737 family, is currently sold out until late 2024.

Cancellations at Airbus came from its decision to scrap its A380 superjumbo and from a slew of cutbacks at embattled carriers. The A380 cuts were led by Emirates, by far the double-decker's biggest operator, while Abu Dhabi-based Etihad and Hong Kong Airlines, both cut orders for the smaller A350.

Avianca slashed its Airbus order book by 10 A350s and 62 A320neos in December, and the bankruptcy of Berlin-based Germania lost the plane maker an order for 25 narrowbodies earlier in the year.

Despite its production constraints, Airbus brought in 1,131 orders last year for a net total of 768 -- slightly more than in 2018. The new orders were boosted by the launch of a A320 variant that boasts more range. The bigger A321 XLR has been eating into the potential market that Boeing envisions for its first all-new aircraft model in a decade.

Boeing's 246 new-order tally last year included deals for 113 of its 787s and 38 of the widebody 777. The new 777X, which has been delayed by design and production problems, secured no new orders.

Write to Doug Cameron at doug.cameron@wsj.com and Benjamin Katz at ben.katz@wsj.com

(END) Dow Jones Newswires

January 15, 2020 02:47 ET (07:47 GMT)

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